1 RECORDING TRANSACTION TO GENERAL LEDGER To simplify of recording transaction in a company needs a basic procedure To Process of recording transaction.

Similar presentations

Presentation on theme: "1 RECORDING TRANSACTION TO GENERAL LEDGER To simplify of recording transaction in a company needs a basic procedure To Process of recording transaction."— Presentation transcript:

1
1 RECORDING TRANSACTION TO GENERAL LEDGER To simplify of recording transaction in a company needs a basic procedure To Process of recording transaction needs some accounts and general ledger

3
3 General ledger is just a book containing all the company’s accounts A manual (handwritten) bookkeeping system generally uses ledger to classify business transactions by account Each page of the ledger usually represents one account General Ledger

4
4 Usefulness of an Account A group of accounts for a business entity is called a ledger A list of the accounts in the ledger is called a chart of accounts A chart of accounts is designed to meet the information needed for company’s managers and other users of their financial statements

6
6 Characteristics of an Account The simplest form of an account has three parts:  Each account has a title which is the name of the item recorded in the account  Each account has a space to record increases in the amount of the item  Each account has a space to record decreases in the amount of the item

7
7 Form of Accounts A simplest T – Form of Accounts Name of Account (Left side/ debit) (Right side/ Credit)

8
8 Name of account is in list heading The date column is used to record the transaction time occurred The description column is used to record a description related to the transaction F-column is filled journal page when posting to general ledger is done

9
9 A Completely T – Form of Accounts DateDescriptionRefAmountDateDescriptionRefAmount Debit SideCredit Side Number: Name of Account

12
12 The Rules of Debit and Credit on Assets To INCREASE an ASSET – type account, enter the amount on the DEBIT side To DECREASE an ASSET – type account, enter the amount on the CREDIT side All assets accounts should have DEBIT BALANCE at the end of the period because increases can be expected to exceed decreases

13
13 To INCREASE a LIABILITY and an EQUITY – type account, enter the amount on the CREDIT side To DECREASE a LIABILITY and an EQUITY – type account, enter the amount on the DEBIT side All liabilities and equity accounts should have CREDIT BALANCES at the end of the period, because increases can be expected to exceed decreases The Rules of Debit and Credit on Liabilities and Equity

18
18 ASSET ACCOUNTS = LIABILITY ACCOUNTS + CAPITAL ACCOUNTS Increases are recorded on the left or debit size Decreases are recorded on the right or credit side Decreases are recorded on the left or debit side Increases are recorded on the right side or credit side Decreases are recorded on the left or debit side Increases are recorded on the right side or credit side The Rules of Debit and Credit to Real Account in Accounting Equation DEBIT balances for ASSETS CREDIT balances for EQUITIES

21
21 Analyzing the Impact of Business Transaction to the Accounts The Analysis of transaction is a critical step in accounting cycle This step will have an impact to the following steps It is used to understand the impact of transaction to the accounts in accounting equation

22
22 Each business transaction will cause at least two accounts and the sum of debit must be equal to the sum of credit This equality of debit and credit for each transaction is built into the accounting equation: Assets = Liabilities + Owner’s Equity It is also because of this double equality that the system is known as double-entry accounting

23
23 Recording transaction in Account Examples: Transaction 1: January, 02, 2008, Kartika established a Transportation and Travel Company named “Widya, Co”. She invested Cash Rp. 1,000,000,000 and Office Supplies Rp. 15,000,000. Those transactions will be recorded on the accounts as follows: